Since the 2001 recession, average core inflation has been below the Federal Reserve's 2%
target. This deflationary bias is a predictable consequence of a symmetric monetary policy …

Under conventional inflation targeting (IT), the lower bound on nominal interest rates gives
rise to a systematic downward bias in inflation that substantially reduces welfare. Using two …

Liquidity traps can be either fundamental or confidence-driven. In a simple, unified New
Keynesian framework, I provide the analytical condition for the latter's prevalence: enough …

Even when the policy rate is currently not constrained by its effective lower bound (ELB), the
possibility that the policy rate will become constrained in the future lowers today's inflation by …

Occasionally binding constraints (OBCs) like the zero lower bound (ZLB) can lead to
multiple equilibria, and so to belief-driven recessions. To aid in finding policies that avoid …

We study optimal time-consistent monetary and fiscal policy in a New Keynesian model
where occasional declines in agents' confidence give rise to persistent liquidity trap …

We examine the implications of less powerful forward guidance for optimal policy using a
sticky-price model with an effective lower bound (ELB) on nominal interest rates as well as a …

Structural models with no solution are incoherent, and those with multiple solutions are
incomplete. We show that models with occasionally binding constraints are not generically …

In a tractable heterogeneous-agent New-Keynesian model, I study analytically liquidity
traps. Heterogeneity determines whether liquidity traps are confidence-driven or …

I model a stochastic non‐cooperative game between an independent central bank and a
treasury and study optimal time‐consistent policy in the context of demand‐driven …